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* The incomperable Yvette Shields at the Bond Buyer…
The [Illinois Sports Facilities Authority] has about $415 million of outstanding debt mostly tied to the 2003 reconstruction of the Chicago Park District-owned Soldier Field to benefit the Bears. Much of the debt issued in 1989 for the authority-owned Guaranteed Rate Field, home to Major League Baseball’s Chicago White Sox, has been retired.
With interest, ISFA owes $743 million of debt through 2032. Debt service this year totals $53.5 million and rises to $56.8 million next year. It hits $60 million in 2025 and $64 million in 2026 before holding steady at $67.5 million for three years. It then ramps to $78.6 million in 2030, $86.5 million in 2031 and $90.5 million in 2032.
The authority’s 2014 bonds become callable next year and the state budget signed in 2021 gave the authority room to extend debt to 2033 from the current cap of 2032 by keeping the state’s “advance” on hotel taxes in place a year longer.
The additional one year doesn’t provide much breathing room and likely would still leave the city to cover shortfalls because of the growing debt service payment ramp. “It doesn’t the solve the total impact,” [ISFA Chief Executive Officer Frank Bilecki] said.
ISFA sees an additional five years as needed to smooth out a steeply rising debt service schedule, but that would require state approval. While the structure would remain in place, the city and state would be refunded for their $5 million subsidies. […]
Under the complex structure a “state advance” of up to 60% of a 5% statewide hotel tax is pledged to the bonds but the agency must repay most of that advance at the June 30 fiscal year end. The authority’s revenues come from a local 2% hotel tax, a $5 million annual state subsidy and a $5 million city subsidy.
Chicago hotel taxes will fall $9 million short this year, the second shortfall in a row. No way will they be able to meet those higher bond payments.
Thanks, Mayor Daley.
* Another way of raising revenues would be to expand the hotel/motel tax. From the Illinois Hotel & Lodging Association…
The hotel industry supports home sharing - the rights of property owners to rent out a room in their home - and we have advocated for ordinances that officially legalize such short-term rentals. But we also believe short-term rentals should abide by the same laws as hotels and every other business. Most importantly, the Illinois Hotel & Lodging Association believes that short-term rentals should be subject to the same hotel taxes, which would raise new revenue for the state.
AirBNB already collects the tax, but others appear not to be doing so.
posted by Rich Miller
Friday, May 19, 23 @ 10:19 am
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Nice to know that we’re all paying, through hotel/motel tax and the annual subsidy, for this boondoggle. Politicians love to pay for shiney new things with bonded indebtedness. They won’t be in office when the bill comes due, and they get to cut ribbons.
Comment by Sir Reel Friday, May 19, 23 @ 10:28 am
Weren’t some parts of Soliders Field remodeled to the specification of one tenant, specifically the Bears?
Don’t they have an obligation to pay some of this debt?
I’d like to think the new boss at the Bears has thought of this what with all of his experience in these matters.
Comment by Jerry Friday, May 19, 23 @ 10:34 am
This is great reporting. Have we just been paying interest, not principal, on this 2003 debt?
Seems like the Bears should pay off the debt as a condition of any suburban property tax freeze bill. They are the ones who benefited from it so they should pay it off. They are worth $5B. So they can afford to pay it all off.
Comment by Dan Johnson Friday, May 19, 23 @ 10:35 am
Shame Aaron Rodgers sold his stake in the team.
Comment by Flyin' Elvis'-Utah Chapter Friday, May 19, 23 @ 10:37 am
Stretching out the debt — which is what the Director of the Authority suggests is the solution in the article — appears to be more expensive than just paying it off faster. We should have done it when money was free a couple of years ago, but the Bears can pay for it. They’ve got the money and the debt was for them.
Comment by Dan Johnson Friday, May 19, 23 @ 10:45 am
Bears Deal Parameters (I’d like to see)
* Pay $300 million (over 10 years) to Chicago for the bonds.
* No relief for stadium footprint. Taxing “relief” for surrounding complex
** Tax relief for 5-year period, renewable for 5 additional years, maximum 2 renewals, both side need to agree to renewal.
* Infrastructure upgrades (roads, sewers, local traffic) done by the state
Frame things around these parameters, then I can see how a Bears Bailout can work.
The Bears can easily get a $100 million, 12 year naming rights deal “today”
The Bears will have PSL fees, skybox purchases, tickets *in* the skyboxes too, and “partners and sponsors” for in-stadium revenues, let alone concessions, all things bought inside the building.
There’s parking, game parking, all parking that will be revenues each time the facility is used.
The Bears currently carry 2% debt, the NFL will back the note.
The Bears will get a “worth windfall” totaling between $200-400 million on the approved sale of the Washington Commanders.
So… asking the Bears to pony up $300 million (over 10 years) for a deal that’s maximum 15 years, start there.
Otherwise the Billionaire Bears Bailout is horrendous, especially and pointedly for Chicago and schools’ funding around the site.
Comment by Oswego Willy Friday, May 19, 23 @ 10:46 am
I’m doubtful that the Bears will pay anything meaningful towards the debt associated with Soldier Field. At a minimum it should be all we need to know about how dubious these public financing options are. The Bears had no qualms in watching the City of Chicago taking on this crushing debt and then walking away from the stadium built for their use. There’s no reason to believe they’d view the Arlington Heights development any differently. The only certainty in all of this is that as the public took on more and more debt, the value of the Bears only continued to escalate.
Comment by Pundent Friday, May 19, 23 @ 10:47 am
I am sure the Bears had top notch lawyers negotiate their obligations. Good luck getting more than what is in the contract.
Comment by Last Bull Moose Friday, May 19, 23 @ 10:50 am
==Don’t they have an obligation to pay some of this debt==
Yes, it’s called honoring the terms of the lease (including early termination penalties). And I’m sure they’ve paid it dutifully for 20 years.
But OW is correct. If they want to put their hand out for more, there should be renegotiation of the current terms.
Comment by DuPage County AV Friday, May 19, 23 @ 10:52 am
I know I work in lobbying and comms, but I am still scratching my head about this debt. Student loans are the only other place I’m aware of where I’ve seen people own more after 20 years of debt service, but this is insane and the Bears should be shouldering this burden.
Comment by New Day Friday, May 19, 23 @ 10:55 am
Mr/Ms New Day
We think you chalk this up to the genius of the McCaskey’s
Meanwhile how about some savvy lawyer slap a lien on the them, the NFL etc.
Comment by Annonin' Friday, May 19, 23 @ 10:57 am
OW you are being too kind today. The Bears deserve nothing other than to pay their fair share of taxes.
Comment by Steve Friday, May 19, 23 @ 11:06 am
Municipal Stadium in Cleveland used to be referred to as “The Mistake on the Lake” until its demolition in 1997. Now, I think the title can be appropriately transferred to “Soldier Field.”
The “Grant Park Stadium” was a boondoggle from the date that the now defunct South Parks Commission okayed it almost a century ago.
Comment by Gravitas Friday, May 19, 23 @ 11:08 am
- Steve -
I appreciate that, but that $300 million towards those bonds and the state helping AH with infrastructure around that footprint , it’s pain and help for all, no clear winner…
… and not one soul (nor should they) will read that comment as a true plan that will bring a deal.
But, I appreciate you saying it.
:)
Comment by Oswego Willy Friday, May 19, 23 @ 11:10 am
What @Steve said? Yeah, yep exactly what he said +1
Comment by JS Mill Friday, May 19, 23 @ 11:14 am
The process has been a disaster. The Bears honored their part of it. Just because it is such a mess, it doesn’t mean the Bears should get hammered now. There was a contract. All parties should honor that contract.
Comment by Appears Friday, May 19, 23 @ 11:15 am
–There’s no reason to believe they’d view the Arlington Heights development any differently.–
The Bears own the Arlington site unlike Soldier Field, where they just have to pay to get out early. That said I don’t recall anyone outside of City Hall, the Bears, and a handful of fans who believed the Soldier renovation was a good idea. The appearance, capacity, functionality, and financing were all giant disasters. But the Bears were far from the only private entity to fleece the taxpayers under Daley. Parking is a daily reminder of that to Chicagoans.
It seems like public officials are wiser this go around. Twenty years is still relatively fresh.
Comment by Independent Friday, May 19, 23 @ 11:17 am
- JS Mill -
Don’t get me wrong.
I’m “not one nickel”, as I can’t see any parameter, even my (silly) own won’t make the Bears Bailout “fine”
But, I went all “Captain ‘Smiling Jack’ Ross” on this, that “off the record”, there is, could be, a deal down the road, on a big package, done at an 11th hour, no one will have read it, so let’s hope that the deal services debt, and is far-far less that 40 years.
The Bears can (honestly, they should) turn down every deal, just play it out, pay it out, eat it, and realize they are already going to maximize revenues by wide margins, versus where they are now.
But, do me a solid - JS Mill -, keep all this between us
:)
Comment by Oswego Willy Friday, May 19, 23 @ 11:20 am
===it doesn’t mean the Bears should get hammered now. There was a contract. All parties should honor that contract.===
The Bears want a bailout.
Welp, “here are the parameters”
If the Bears go at it alone, who cares what anyone thinks to what the Bears “owe”, a dime or any nickel towards the bonds.
But, the Bears want a bailout. That’s the rub.
Comment by Oswego Willy Friday, May 19, 23 @ 11:22 am
-realize they are already going to maximize revenues by wide margins, versus where they are now.-
Yes, because the state of Illinois has much bigger problems like keeping public pensions solvent and many other issues.
Comment by Steve Friday, May 19, 23 @ 11:31 am
=it doesn’t mean the Bears should get hammered now.=
The Bears should get nothing. The Chicago arrangement provide us with all the evidence we could possibly need of that. Personally I don’t have a problem with that. The City of Chicago was duped into making a bad deal. There’s no reason that Arlington Heights or the State of Illinois should feel compelled to do the same.
Comment by Pundent Friday, May 19, 23 @ 11:34 am
I’m reading numbers that I’m finding while googling, so my sources could be bad. But is it correct to say the original debt was $432M and after 20 years it is $415M?
Comment by Lurker Friday, May 19, 23 @ 11:43 am
=With interest, ISFA owes $743 million of debt through 2032=
I can’t say I understand this financing scheme or many others that public/governmental entities enter into. But should there be a law to that bonds and financing can’t exceed a length of time or the payback rate has to remain at a minimum percentage of the debt?
I guess I don’t even know if that would make a difference here or not. But kicking cans this far down the road just shouldn’t ne allowed. This whole thing should have been paid for in 20 years.
Comment by Cool Papa Bell Friday, May 19, 23 @ 11:55 am
==But should there be a law to that bonds and financing can’t exceed a length of time or the payback rate has to remain at a minimum percentage of the debt?== Yes, or at least require level payment. This looks like the pension ramp.
Comment by SAP Friday, May 19, 23 @ 12:02 pm
IF anyone has time read Joe Cahill today in Crains. He is in total agreement. They sure are a greedy bunch but start high you can always go down.
Comment by regular democrat Friday, May 19, 23 @ 12:02 pm
It a house of cards.
Wait until the other shoe drops.
Comment by Chicago 20 Friday, May 19, 23 @ 12:11 pm
The bears will not be leaving for awhile so the city/park district needs to keep that in mind and start paying down the debt while the money flows. (Side Bar - hope the bears provide a team worth seeing) When the bears break the lease, that is when they should be charged extra to help pay for the improvements that they wanted and required at the time. Hopefully the lease agreement has language to be able to charge extra if it is broken. If necessary, add a fee to tickets that is being talked about but the problem is, fans are now paying and not the bears. The Bears as the leasee should not be able to walk away from a lease without making the leassor whole
Comment by snowman61 Friday, May 19, 23 @ 12:19 pm
“There was a contract. All parties should honor that contract.”
And now the Bears want more.
That was their choice, and choices have consequences.
– MrJM
Comment by MisterJayEm Friday, May 19, 23 @ 12:23 pm
The Bears are talking about raising taxes for the new place in the ‘burbs. Isn’t that very idea anathema to Republicans?
Comment by Jerry Friday, May 19, 23 @ 12:24 pm
=If necessary, add a fee to tickets that is being talked about but the problem is, fans are now paying and not the bears=
Seeing those outstanding liabilities I think you could make a case for $3-$5 being added for the start of this season (without any other bailout talk), a drop in the bucket but you gotta fill it somehow.
Comment by Cool Papa Bell Friday, May 19, 23 @ 1:31 pm
Pensions are a promise and should never be renegotiated with respect to those who have already done their time and rely on them. It would be hypocritical to ask the Bears pay this debt that they have no obligation to pay unless you also support the City and State reneging on pension promises.
Comment by Garfield Ridge Guy Friday, May 19, 23 @ 3:46 pm